Recycling Is Not Broken: Facts vs. Fiction. Northeastern Recycling Council April 12, 2016

Transcription

1 Recycling Is Not Broken: Facts vs. Fiction Northeastern Recycling Council April 12, 2016

2 WM Recycling Services 88% Increase in amount of recyclables managed since M Tons of recyclables extracted from the waste stream 100 Materials recovery facilities owned/operated by Waste Management (12/2015) WM has invested over $1 billion in recycling infrastructure

3 Overview Recycling services reflect our customers needs. Recycling revenue has grown to become WMs second largest revenue source. There is a lot of attention on recycling at WM. We ve seen a large-scale shift to single stream collection The changing waste stream, combined with constricting markets requires a new emphasis on material quality. Roughly 70% of our MRF feedstock comes are from residential collection contracts. Contract language varies greatly. Municipal contracts are evolving as recycling becomes less of a commodity.

4 Strategies for long term success Operational efficiencies Identify underperforming facilities/contracts. Worked with MRFs to identify problem materials Strategic capital investment (contracts, clear benefit) Public Education Efforts to improve inbound quality Developed Recycle Often. Recycling Right. Municipal contamination efforts Chicago & Elgin (ILL), Antelope Valley (CA) and Springfield, MA Changing the Business Model Contract language Linking changing waste stream, contamination, markets to contract terms Collaboration Partnering with other organizations. We can t do it alone!

5 Collection - most expensive component Curbside collection Collection costs make up over 60% of the integrated cost of MSW/recycling programs. Collection costs for glass (curbside) collection are $ /ton. What costs goes into collection Trucks, equipment Employees Insurance, Workers Comp Fuel Maintenance Possible tip fee Single stream recycling increases recycling volume while reducing overall cost

6 Optimize MRFs close/sell underperformers WM has 30 fewer MRFs (21%) in 2016

7 SS Inbound Materials Stream is changing Mixed Paper 12% Inbound SS Composition Steel 2% Plastics 6% Aluminum 1% Newsprint 25% Residue 16% Cardboard 20% Glass 18% Fiber represents 60% of the inbound stream Residue is 16-19% of the inbound stream Glass makes up 18% of the material processed at our MRFs. 34% Inbound material has negative value - Glass/Residue

8 Reducing the 34% Glass (18%): Reviewing processing equipment Alternative collection Alternative markets Charging to cover cost Contamination (16%) Identified key contaminants that dilute revenue Plastic bags Bagged garbage Food/organics Clothing/textiles

9 Reducing Operating Cost Focusing solutions and education around these: Plastics bags Tanglers Bagged recyclables Glass

10 Audits Audit Inbound, Outbound, and Residue Audits Allows us to understand what material we pay for, what the quality of the material is we sell, and what kind of material we are paying to dispose MRF % Recyclables in Residue Estimated Annual Tons Estimated Annual Missed Value Audits Completed vs. Required Q3 Q4 Q1 June Q3 Q4 Q1 June Q3 Q4 Q1 June YTD Required Completed Variance Orlando MRF 9.9% 30.0% 41.4% 45.3% 1,349 4,088 5, $ 822,130 $ 1,467,399 $ 1,806,264 $1,075, Reuters MRF 19.8% 10.3% 9.5% 7.8% 1, $ 740,672 $ 334,772 $ 278,072 $125, Tampa MRF 42.4% 56.4% 33.9% 46.0% 6,754 8,984 5, $ 3,160,533 $ 2,779,920 $ 2,175,065 $4,510,

11 Improving inbound quality

12 Recycle Often. Recycle Right. SM Overview & Objectives RORR based on national surveys, focus groups, & CBSM research easy to use, targeted messages to drive consumer behavior Deliver Recycle Often. Recycle Right campaign messaging to national, community, industry and residential/consumer audiences Fully harmonize with internal and external stakeholders to drive positive recycling results. Publicly improve awareness of contamination and individual role in positively impacting the waste stream for recyclables.

13 Changing behavior

14 Taking it to the streets Goal: Implement & Test Education, Enforcement and Penalty strategies to identify impact on reducing contamination and ROI per strategy. Concept: Apply education, and different enforcement and penalty strategies to communities; and measure each strategies impact Target Areas: Started with two cities in Midwest and CA Success Criteria: Develop sustainable strategies to reduce contamination & associated cost; increase volume; identify strategies that are ROI positive. Financial Goal: Develop saleable solutions w/net benefits

15 Strategic education

16 Immediate customer feedback Contamination cart hanger Positive re-enforcement cart hanger

17 Municipal contracts 2.0 Few municipal contracts reflect the evolution of the recycling business Fixed supply (no supply/demand balance) Increased contamination Changing waste stream New pricing models New contract language reflects changing business models Define material in the waste stream Charge for contamination & glass Processing fees that to cover cost + margin Audits before and during contract term to identify & contamination Educating the customer Provides for adequate education Allows enforcement

18 Collaboration Trade Associations: APR, Ameripen, ACC, GMA, ISRI NWRA, PacNext, SPC, SPI, SWANA The Recycling Partnership Contamination focus nation-wide. More,,better Keep America Beautiful EPA, States & City partners

19 Cause and Effect Changing packaging Low commodity prices Consumer cost Processing cost Contamination What happens at home does not stay at home (and vice versa)

20 Questions?